Introduction: The Hidden Reason Behind Low Profits
Many MSMEs in manufacturing, electrical, and construction face one common issue — “Good sales, but low profit.”
Often, this is not due to fewer orders or small customers.
It happens because of how materials are planned and purchased.
Poor planning in buying raw materials or project items silently eats 10–25% of your profits every year.
Let’s understand how this happens and how you can fix it.
How Poor Planning Hurts Profits
| Problem | What Happens | Result |
| Last-minute buying | Buying from any available supplier at higher price | Extra 5–10% cost |
| No stock when needed | Work stops or gets delayed | Project delay or penalty |
| Too much stock | Money stuck in inventory | Low cash flow |
| Low-quality or wrong items | Need to rework or scrap | 2–5% loss |
| No price comparison | Paying above market rate | 10–15% more cost |
Example:
If a contractor spends ₹25 lakh/month on materials, and poor planning adds 10% more cost → ₹2.5 lakh lost monthly → ₹30 lakh in a year.
That’s profit gone — without any visible reason.
Data That Proves It
- 70% of MSMEs in India face delays due to material unavailability or supply chain issues.
- Studies show poor material planning leads to 15–25% project cost overruns.
- 15% of MSMEs delay vendor payments because money is stuck in unsold or excess stock.
(Source: ResearchGate, ET Manufacturing, L&T SuFin MSME blog)
Why It Happens
- No advance planning – Orders placed only when materials run out.
- Every team buys separately – Missing the chance for bulk discounts.
- No fixed suppliers – Prices change every time.
- Manual work – Excel or WhatsApp causes mistakes and delays.
- No tracking – You don’t know what was wasted or over-ordered.
How Xenova Venture Helps MSMEs Fix This
At Xenova Venture, we help MSMEs and contractors stop margin loss caused by poor material planning.
Here’s how we make it simple and profitable for you:
- Plan material needs early – Forecast next month’s requirement in advance.
- Centralized sourcing – Combine demand to get bulk pricing even on small orders.
- Timely delivery system – We ensure the right material reaches you when needed.
- Procurement planning support – So you never buy in panic or excess.
Our clients save 5–10% on material costs and complete projects 10–20% faster with more predictable cash flow.
The Result
- Lower project cost
- Better cash flow
- On-time project delivery
- Higher profit without more sales